CHENNAI: With the Rajya Sabha clearing the long pending Real Estate (Regulation and Development) Bill (which now makes into an Act), the realty sector can heave a sigh of relief.
The new Act paves the way for Tamil Nadu setting up the State Real Estate Regulatory Authority once the State government ratifies the Act.
The national chairman of Confederation of Real Estate Developers’ Association of India (CREDAI), T Chitty Babu, told Express that the Act is a welcome move as it will give a level playing field for developers.
“This would regulate the approval process,” said Babu. However, developers feel the Real Estate Bill has failed to bring an important stakeholder into its fold — the government.
Babu says that there are four stake holders in the development of a real estate project. “One is the developer, the second is the financial institutions, the third is the customer. The fourth stake holder, the government, has not been brought into the ambit of the bill. The government plays an important role in the approval process. Now we will have 58 windows and a door,” he said.
But then the Act would also be beneficial to the consumer. As per the Act, the developer has to keep 70 per cent of the project funds in a dedicated bank account. This will ensure that developers are not able to invest in numerous projects with the proceeds of one project. The Act will also stop the practice of selling on the basis of ambiguous super built-up area as the ‘carpet area’ has been clearly defined.
The Act would also regulate the real estate brokerage business in Chennai worth approximately around `500 to `600 crore a month. Chennai Real Estate Agents Association earlier urged the State to implement the Real Estate Regulatory Authorities to regulate brokerage business in the city once parliament passes the real estate regulatory bill.
Ajit Chordia, president of CREDAI, Chennai, said that with the passage of the bill, a single window clearance, online approvals, model building by-laws will be implemented. Anuj Puri, chairman and country head Jones Lang LaSalle, said t the Act stipulates strict punishment for errant developers as well as fines for project delays and faster redressal of consumer complaints. Norms on the size of projects have been relaxed from 1,000 sq m to 500 sq m, and further reduction is possible.